Abstract

This paper studies reciprocal interlocks of boards of directors of large firms where an employee of firm A sits on firm B’s board and at the same time an employee of firm B sits on firm A’s board. The study of Boards of Directors by those in economics and finance is not new. In fact, Dooley (1969) writes of interlocking directorates, but his definition is different in that he presents evidence of interlock where “at least one director... sat on the board of at least one other of the largest companies”. Books by Mizruchi (1982) and Pennings (1980) as well as many articles, for example Bearden and Mintz (1985), Bunting and Barbour (1971) and Mintz and Schwartz (1981). discuss interlocking boards in much more detail from a sociological perspective. Mizruchi and Stearns (1988) study the longitudinal formation of interlocking directorates using a small sample of firms.

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